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As usual, when Fed chairman Ben Bernanke testified before Congress this week not a single Congressman asked him why he deliberately and transparently triggered the Great Recession of 2007-2009, which was accompanied by a frightening financial crisis, gargantuan bailouts and huge fiscal deficits. Nor has Bernanke been held accountable for his culpability during previous Congressional testimony or during his press conferences. Committee members and financial journalists alike are ignorant of the evidence staring them in the face.

Bernanke typically is described as that rarest of combinations: a Republican yet also an Ivy League academic, a bureaucrat who's nevertheless respectful of markets, an expert on the Great Depression yet aware of the Fed's role in it, and above all a man supposedly wise enough to not let "it" happen again. Yet in 2008-2009 Bernankedid nearly let "it" happen again -- a banking collapse, a depression, deflation -- by bringing the U.S. financial system to its knees by roughly the same Fed policy adopted in the 1930s, followed by his blizzard of paper-money printing that has caused a dollar debasement unprecedented in U.S. history. The result has been a huge destruction of wealth, spreading fiscal chaos and stagflation as far as the eye can see.

How did Bernanke create this horrible morass? First, in 2006-2007 hedeliberately inverted the Treasury yield curve, even whileknowing it would cause a recession and credit-financial crisis. Second, he imposed on the reeling economy a $1.7 trillion flood of "quantitative easing" (QE), euphemistic for the hazardous policy of money-printing. His first policy caused economic stagnation, his second policy caused monetary inflation, and combined, his policies have generated "stagflation" -- the corrosive mix last seen in the 1970s. It's the directopposite of the supply-side polices (pro-growth, sound-money) that made the 1980s and 1990s so prosperous.

How can we hold Bernanke accountable for this widespread mess? Consider first the economic stagnation. By training, Bernanke knew full well (and still knows) that an inverted Treasury yield curve -- wherein the Fed deliberately keeps short-term interest ratesabove longer-term Treasury bond yields -- invariably causes recessions and crises in the modern (fiat paper money) era.

He knows that an inverted yield curve severely and nearly instantly rendersunprofitable most financial intermediation, which is the process of "borrowing short to lend long." The normal case is for short-term borrowing yields to trade below long-term investment yields (an upward-sloped yield curve), which is profitable for credit intermediaries, given the positive yield margin. In contrast, the rarer case is for short-term rates to trade above long-term rates (an "inverted," or downward-sloped yield curve), which is far less profitable or an outright loser for lenders, due to the negative yield margin.

Bernanke knows all of this -- and far better than his clueless interrogators. In a 2004 speech titled "What Policymakers Can Learn from Asset Prices" Bernanke recounted the unassailable historic evidence that an inverted yield curve is invariably bearish with a reliable time lag of a year or so. "Various yield spreads have been found to be informative about the future course of the economy," he said, and "some have exceptionally good forecasting track records," especially "the slope of the yield curve," which is "measured as the 10-year bond rate less the 3-month bill rate." He conceded that "evidence for the predictive power of the slope of the yield curve" is abundant, and exists "for other industrialized countries as well as the U.S."

As Bernanke acknowledged, "the slope of the Treasury yield curve" has been "recognized for some time as a useful indicator of cyclical conditions," that it "has turned negative between two and six quarters before every U.S. recession since 1964," that U.S. recessions invariably have "followed the inversion of the yield curve," and that the yield curve "captures the stance of monetary policy."

The latter concession means that the Fed can easily and deliberately invert the yield curve whenever it chooses, either with short-term rate hikes or passivity in the face of plunging bond yields. Likewise, the Fed also can always act toprevent an inverted yield curve – and thus also to prevent future recessions. Notably, the U.S. yield curve was inverted prior to all seven U.S. recessions in the past half-century and no recession occurred in that timewithout a prior inversion. That's aperfect forecasting record. The Fed also inverted the yield curve prior to the 1929 stock-price crash and Great Depression in the 1930s. The only "criticism" the Fed got in subsequent decades was that it didn't follow its punitive rate policy with massive money-printing.